NEXTAFF: Preparing for Economic Uncertainty
Numerous economists and analysts projected that a recession would be approaching in light of the COVID-19 long-term global health problem and the ensuing economic unpredictability.
The tide may be turning after a protracted period of job growth and recovery following the Great Recession of 2008. The worldwide pandemic, zero interest rates from the Federal Reserve, the conflict over oil prices, and the volatility surrounding the U.S. presidential election are all worrying economic elements causing us to live in uncertainty. Everything that rises must ultimately fall.
Because business cycles are cyclical, a recession must occur at some time. Owners of staffing companies should think about the implications of a potential recession for staffing. We’re looking at enormous possibilities for people who wish to start their staffing firms, although it could seem frightening. Recessions are an excellent period for business for staffing companies.
In this article, we’ll break down why the staffing industry is recession-proof and how a franchise with NEXTAFF could be the best decision for entrepreneurs looking to enter this industry in the wake of a potential economic recession.
Is the Staffing Industry Recession-Proof?
Demand for contractors and part-timers typically increases during recessions. Many believe that firms won’t hire new staff during a downturn because they wish to reduce their expenditures. Though, in theory, this could be the case, the truth is a little bit different!
Businesses need every competitive edge to position themselves as effectively as possible to survive difficult times. Therefore, they strive to find contract workers to replace the people the corporations have decided to let go. This opens the door for staffing organizations to support businesses through these trying times and connect them with the ideal people.
The market is oversaturated with unemployed people during a recession, and most people scramble to find new jobs. At these times, employers are inundated with employment applications. However, many employers frequently struggle to find the right individuals since many resumes exist. The cause? There is a lack of relevant information and valuable selection tools to ensure they have the most acceptable option for their needs.
This necessitates the use of a staffing company. Through a thorough screening procedure, staffing agencies may assist organizations of all sizes in sifting through the sea of applications to find the perfect match.
Employers desire to locate qualified workers during recessions without incurring high advertising costs. Companies without a dedicated recruiting department may occasionally be unsure where to place their job postings to attract suitable applicants without going over budget. Every cent matters during the recession. Staffing agencies may assist businesses in reducing advertising costs and locating the most qualified applicants for open positions. This facilitates the acquisition of top people and spares companies from costly marketing expenses.
Recession-Proof Industries Result in Recession-Proof Staffing
The staffing industry is inherently recession-proof simply because other recession-proof sectors exist. These industries will always require new employees and staff sourcing, which a staffing firm like NEXTAFF can provide. Let’s consider a few core industries that would keep the staffing industry afloat during a recession.
NEXTAFF frequently hires people from the healthcare sector. As we approach 2022 and beyond, the healthcare business is anticipated to continue expanding; this projected expansion is primarily because of the COVID-19 pandemic and an aging population, increasing the need for healthcare recruiting. The strain on international health systems, providers, and personnel had already risen to unmanageable levels. Before the COVID-19 outbreak threw the healthcare system into turmoil and overcrowded hospitals, there was already a lack of Care Staffing Professionals. Due to this epidemic, the value of healthcare professionals to society has received renewed focus.
Companies that perform research, provide test kits, create possible vaccinations, and create or supply medical equipment are expected to gain the most as healthcare spending for COVID-19 rises tremendously. The explanation is simple: governments worldwide will invest in damage repair and measures to prevent the epidemic from spreading again. The healthcare sector is frequently referred to as recession-proof. The healthcare system is now researching methods to speed up recruiting as firms close. The U.S.’s most prominent industry by the number of employees in 2018 was healthcare. By 2024, California alone is expected to require almost 500,000 new healthcare positions. Healthcare personnel is more in demand than ever because hospitals are overcrowded.
Healthcare and medical staffing are expected to rise by 16% between 2020 and 2030, far higher than the average for all occupations and adding roughly 2.6 million new jobs, according to the Bureau of Labor Statistics. That is almost three times faster than the average growth rate for all other professions. Six of the top 10 fastest-growing careers in the U.S. are in the medical field. A rise in employment for various healthcare positions, including nurse practitioners, medical assistants, and aides to physical therapists, is predicted to be fueled by an aging American population. Across the range of educational pathways, there are opportunities in health.
More occupations are expected to be added to the healthcare sector than any other occupational category. Even if the curve is starting to flatten, there will still be a high need for these front-line workers. Instead, the healthcare sector is just beginning a decade of tremendous expansion.
Is a Recession Coming in 2022?
Recessions are still challenging to foresee, despite our data and understanding. In total, there have been 11 recessions since World War II. The economic upswing is the third-longest growth in history and started in the middle of 2009. A recession is widely expected to occur over the next two years since; thankfully, good times do not endure forever.
According to recent economic forecasts, the chance of a recession increases along with an increase in inflation. This might soon lead to more layoffs, fewer workers, and higher interest rates. According to a Bloomberg survey of economists conducted in July, the median likelihood of a recession over the next 12 months has climbed from 30 to 47.5%.
Although the formal definition of a recession is two consecutive quarters of declining GDP, a measure of economic growth, many economists agree that this is inadequate to call one. The National Bureau of Economic Research, a nonprofit organization that tracks peak and trough months of economic growth, defines a recession as one in which each of the three criteria—depth, diffusion, and duration—is partially met rather than as a widespread contraction in the economy that lasts longer than a few months.
One of the leading causes of the idea of an imminent recession is that there are few signs that inflation would slow down. According to the consumer price index statistics, inflation in July was above 9% year over year.
Declining consumer spending is a harbinger of an impending recession. According to bank powerhouse Wells Fargo’s projection, overall consumer spending will likely drop by September 2022 as more consumers utilize their savings to offset rising prices for goods and services.
Market-related shocks to the economy have caused recessions in the past. Examples include the 2008 financial crisis, which was brought on by weak lending regulations and the housing crisis, or the early 2000s internet bust, which was brought on by excessively zealous investing in technology companies. The Federal Reserve, the central bank in charge of monetary policy in the United States, avoids recessions through its policy decisions. Interest rates recently increased to combat inflation.
Inflation reduces your compensation or income since it grows more slowly than your revenue. Your home’s worth, savings, and purchasing power all decline. Although the pandemic is far from gone, consumers’ increased expenditure in the months after COVID-19’s severe impacts made it difficult for suppliers to meet demand initially.
While analysts concur that we are not in a recession right now, the future is not looking great. More than two-thirds of the 49 U.S. macroeconomists surveyed by the Financial Times and the Initiative on Global Markets think a recession will occur in 2023. Experts concur that because so many competing forces affect the economy, it is challenging to forecast when, and how long a recession will endure. In June, the unemployment rate stayed at a record-low 3.6%, the same level as the preceding three months. Additionally, there are still a lot of job vacancies in the United States; in May, there were about 1.9 positions for every jobless individual.
What does this entail for those looking to start their own company? Unbelievable as it may seem, it could be the ideal time to open a NEXTAFF staffing franchise location.
Is Starting a Franchise a Wise Decision During a Recession?
Challenging periods include recessions and choppy markets, like the one we’re in right now due to COVID-19. Businesses might become insecure due to an outstanding level of uncertainty, employment losses, and a direct impact on financial flows. It does not have to be wholly negative, though.
Today’s firms are looking at ways to alter their business models, review their budgets, and make new projections to lower their burn rate and extend their financial runway. Although they are growing and surviving, this may be one of the best periods for people thinking about starting a franchise.
Starting a business during a recession may allow you to benefit from a weakened economy and steer clear of many issues that face established businesses. There are a few reasons for this.
One can focus on showcasing their business or service as a novel and enhanced solution. Even with alternatives, demonstrate how your solution is more efficient, trustworthy, and cost-effective. In the case of COVID-19, the best way to approach a new company business model may be to start with remote, delivery, or as-a-service versions of goods or services that haven’t successfully flipped.
With a franchise like NEXTAFF Staffing, one may launch a business with only a little amount of overhead. With this combination, you’re positioned to attract customers and offer a low-cost solution. Both companies and customers may be interested in your product because of the desire to reduce spending during a recession.
If you can save them money while simultaneously giving them better service or a speedier turnaround, there’s a good chance you’ll win them over as long-term customers. They could support your business if you establish a relationship with them today and tell them how you helped them survive the crisis. Because of how you helped them in the past, you may always try to increase prices or provide new services that these clients will be more willing to accept if the economy improves.
A downturn in the economy may also boost competition, which is positive. Strong economic growth fosters more competition. Established businesses are doing quite well, even if more and more business owners are taking risks to start or expand their enterprises. Even if everything seems to disappear during a crisis, there is a space for those willing to take a chance.
If you’ve always wanted to start a business but thought the market was too crowded, the time to do it is now. Since both large and small companies are attempting to adapt and survive in various ways during a crisis, the market is now open to a new entrant, as are your rivals. Your chances of surviving the economic crisis rise if you can take advantage of your lean position and manage your company with a small crew, which NEXTAFF Staffing Franchise makes possible. This is similar to recruiting rival clients.
NEXTAFF – The Statistics for Success
Not sure if NEXTAFF is the right staffing franchise for you? Consider the following statistics if you’re concerned about launching a NEXTAFF business during an economic downturn.
Low Initial Financial Investment
With NEXTAFF, Franchise Owners can enjoy a low $126,850 financial investment. With a $756,819 average gross profit, this initial investment would be considered relatively low.
Just as well, at NEXTAFF, our royalty fees are based on gross wages, not gross revenue or gross profit. Because NEXTAFF structures your business this way, our franchise is usually 15% to 40% more cost-effective than our competition, and Franchise Owners receive around 30% savings.
Resilient in the Face of a Recession
NEXTAFF is not new to the staffing industry. Our franchise not only survived but thrived through the 2008 recession. While the industry was down 30%, NEXTAFF grew by 15%– that’s a big deal!
NEXTAFF resides within the staffing industry, which has grown from $81 billion in 2009 to $151 billion in 2019. Currently, staffing companies place 16 million employees annually, which could grow even more.
Contingent workers, such as freelancers, temporary employees, contract workers, or consultants, reached 51.5 million in 2020 and will only continue to grow in demand. Running a staffing agency could be one of the most lucrative decisions in a potential recession!
We’re Ranked in the Top
In its latest analysis on the Top Recession-Proof Franchises for 2022, Franchise Business Review recognized NEXTAFF as a top franchise. Thirty-three benchmark questions were asked to NEXTAFF Franchise Owners evaluating their knowledge of and satisfaction with key elements of their franchise systems, including training and support, business operations, relationships between the franchisor and Franchise Owners, and financial opportunities.
This is quite a big deal and showcases how valuable a NEXTAFF franchise could be for entrepreneurs who want to launch their staffing businesses during a recession.
Start Your Business-Owning Journey
With NEXTAFF Today
A workforce strategy supplier, NEXTAFF has a great franchise business model, a distinguished resume, and excellent support systems. Using our hiring and recruitment process, X-FACTOR, you can differentiate yourself from the competition when you join the NEXTAFF Franchise network. You’ll have access to our knowledge, marketing, resources for company development, payroll finance, and the whole back office. You’ll have all the advantages of joining a big, reputable, national organization while still having the freedom to run your own company and determine your future.
An estimated $126,850 will be required as a total investment to own a NEXTAFF franchise. This is especially low compared to other franchises of a comparable caliber. We also provide funding through other parties. During a consultation, we would be pleased to discuss extra liquid cash and net worth criteria.
Ultimately, you may take charge of your future by investing in a premium brand in the $185.5 billion U.S. staffing market, which is steady and expanding. The franchise staffing sector is solid regardless of what’s happening around the globe, including a recession. People will always search for fulfilling work, particularly in the recession-proof healthcare sector. Your NEXTAFF staffing franchise can offer the kind of qualified workers that employers and organizations are constantly searching for.
Get in touch with our corporate team today to learn more about how we can get you started on your journey towards business ownership!